MERS Has Second Court Win in Month

For the second time in just under a
month the Mortgage Electronic Registration System (MERS) has won a significant
court victory. The company which serves
as registration agent for major mortgage lenders is currently involved in
multiple lawsuits throughout the country. It prevailed in one of these suits, a case filed
the U.S. Court for the Western District of Kentucky on Tuesday when Christian County Clerk, by and through its
County Clerk, Michael Kem; et al. v MERS; et al. was dismissed with
prejudice.

The county clerks had sued MERS and a
group of MERS members under provisions of the Kentucky laws regarding the
recording of deeds. The Plaintiffs asserted, on behalf of all of the state’s
County Clerks that MERS had violated the statutes in order to avoid recording
mortgages and paying the associated fees.

The Court found that the Clerks lacked
standing to bring the suit. The judge
held that the persons intended to be protected by Kentucky’s land record system
were “existing lienholders seeking to give notice of their secured status,
prospective purchasers and creditors seeking information about prior liens, and
owners of property seeking release of liens once debts are paid off.”

The Court also said that there was
nothing in the statute that would indicate it was designed to be enforced by a
county clerk, saying that had “the General Assembly wanted to allow country
clerks to file lawsuits regarding recording fees, it certainly knew how to do
so.”

On
January 24 the U.S. Court of Appeals for the 11th Judicial Circuit
handed down a more far-reaching decision upholding MERS rights to foreclose on
a property as a nominee and to foreclose on a mortgage that had been physically
separated from the note.